Metal mirrors will be widely used in the coming decades. Therefore, as one of the enabling technologies for metal optical freeform surface manufacturing, ultra-precision (UP) diamond turning error compensation has become a research hotspot. However, for the tool offset error and tool radius error, which are the main errors in UP diamond turning, no precise and efficient calculation method has been found in the literature. In this study, a more precise and efficient algorithm was developed and validated in three ways using on-machine measurement data and profilometer measurement data. After one compensation, the tool offset error can be reduced to below 0.1 μm, and the tool radius error can be reduced to below 1 micrometer, which will significantly improve the UP turning accuracy and efficiency of optical parts.